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Georgia refuses to pay Gazprom price

Georgia says it will not pay Russia the recently increased price for gas and told European nations they too could face politically motivated increases in Russian prices.

14 Nov 2006 16:39 GMT

Georgia plans to be less reliant on Gazprom

Mikhail Saakashvili, the Georgian president, made the comments after addressing the European parliament in Strasbourg on Tuesday.

Gazprom, Russia's state-owned gas monopoly announced at the beginning of November that it would be doubling its price for gas supplied to the former Soviet republic. Saakashvili said Georgia would find other suppliers and use more electricity generated internally.

"Let me make it very clear. We will not pay $230 [per 1,000 cubic metres] because this is not a commercial price when at this moment some of our neighbours are paying $65 in real terms. Some of the others are paying $110, $130," he said.

"If Georgia can get a political gas increase, any other country can get it tomorrow."

He said Georgia would also reduce consumption to work around what he says are Russian attempts to apply political pressure.

He said Georgia's import needs were declining as old, inefficient Soviet-era enterprises ceased to operate and it now needed 1.5 billion cubic metres of gas, mostly for households.

Zurab Nogaideli, the prime minister, had said on Monday that Georgia aimed to source at least 50 per cent of its gas from countries other than Russia by next year and was negotiating with Iran, Azerbaijan and Turkey.

Some of Saakashvili's speech to the EU legislature was also conciliatory to Russia. He said the time for "mud-slinging" was over and that Georgia was ready to negotiate on its differences with Moscow.

He reaffirmed Georgia's long-term ambition to join the European Union, which along with its pursuit of closer ties with the US-led Nato alliance, has angered the Kremlin.